Kluding Custom Farming: A Case Study

Limited Liability Company. (LLC) . a form of business ownweship that offers both limited liability to its owners and flexible tax treatment.

In the corporate form of ownership, the shareholders are the owners of the firm. The shareholders elect the directors of the corporation, who in turn appoint the firm’s management. This separation of ownership from control in the corporate form of organization is what causes agency problems to exist. Management may act in its own or someone else’s best interests, rather than those of the shareholders. If such events

A Limited Liability Company (LLC) is often regarded as a hybrid business structure: it mergers the protection of a corporation with the tax benefits and relative administrative simplicity of a partnership. For these reasons, it is considered an ideal business form for most small to mid-sized businesses with multiple owners.

The corporate form contains its advantages. The Dictionary of Finance and Investment Terms (2006) describes the corporation as a “legal entity, chartered by a U.S. state or by the federal government, and separate and distinct from the persons who own it... it is regarded by the courts as an artificial person; it may own property, incur debts, sue, or be sued…” The same dictionary summarizes also some advantages of the corporate form. It offers a limited liability. The owners can only lose their own assets. It can also transfer ownership through the sales of the shares of stock. If an owner dies, the company will not need to dissolve. This form provides the opportunity to gain capital through expanded ownership, and to facilitate investors to earn more income from the growth of the firm. This legal form gives some advantages, but also some disadvantages.

Limited liability companies are those companies who have the form of the partnership, in which all the partners have the right to participate in management and have the limited liability for company debts.

•Less Recordkeeping. An LLC 's operational ease is one of its greatest advantages. Compared to an S-Corporation, there is less registration paperwork and there are smaller start-up costs.

Disadvantages are the chances of the company plummeting due to poor management, and financial issues is very high (Ferrell, Hirt & Ferrell, 2014). Starting a small business take money to stay afloat and if mi managed for any reason, the company can lose profits and even the ability to stay open. Another disadvantage is lacking the knowledge and skills set is would take to elevate the business in an innovative era. More so, owners are usually charged higher interest rates on funds borrowed based upon their own personal credit determinates, opposed to support from investors who are able to get lower interest rates based upon their determinants.

Easy tax preparation since your business in not taxed separately so it is easy to fulfill the tax reporting requirements for a sole proprietorship. The tax rates are also the lowest of the business structures, and all profits go into the owner’s pocket

Limited liability company (LLC): I will like to focus on Limited liability company, this is a corporate design partnership in which all partners are not responsible for the debts and other obligations of the other partner’s and this is the reason we choose this business. Members of the company cannot be held personally liable for the company’s debts or liabilities. The business we chose is important to

A Corporation, which is sometimes called C Corporation, is a group of company or an independent legal entity owned by shareholders and authorized by state, with a separate and unique existence from its owner. Lau & Johnson (2011, p. 195) It is more elaborate than the other business forms due to the fact that it is costly to set up, involve corporate tax and legal requirement. They offer the capacity to sell ownership shares in the company through stock and to the public through initial public offering (IPO), which is the main selling point in pulling investment capital and high quality employees.

The SBA says a sole proprietorship is an unincorporated business owned and run by just one person. There is no difference between the owner and the business. That means you, the owner, get all of profits, but you are also responsible for all your business’s losses, debts, and liabilities.

Corporations are seen as separate legal entities by the government and are therefore taxed separately, twice during the year. The actual owners of the corporation are the shareholders that have invested into it and own stock in the company. The shareholders then elect a board of directors to run the company for them (Custom Text, pg. 265, 2015). Corporations can be either big or small, so big name companies like Walmart aren’t the only type of corporations out there.

Disadvantages: Disadvantages of a corporation is a business is difficult to set up. The owners do not run the firm, and there are government regulations. It has a difficult and expensive start-up, loss of control, and other regulations. Double taxation, the owner must pay company tax and personal income own tax. Government regulation, and expensive and complex to form.

Today’s world is full of corporations doing business in every industry and sector that we can imagine. These corporations are set up to separate the business from its owners and insulate their assets. There are times, however, in the interest of equity when the corporate veil is allowed to be lifted and the assets of the owners are exposed. (Dignam) Throughout this paper, I will discuss the difference between a corporation and a private entity and when the corporate veil can be lifted according to the cases in the UK law.

The disadvantages of a partnership is they also have unlimited liability allowing them also to become sewed by creditors. Partnerships also can have partner disagreements which can cause a business to get off the goal that they are trying to achieve. In some cases disagreements can not be resolved and partnerships have to split up. If the partners of the business split up or one of the partners want out the assets of the business become frozen until the partnering wanting out gets their share of the business.